ILOMATAILOMATA

Ilomata International Journal of Tax and AccountingIlomata International Journal of Tax and Accounting

This study investigates the impact of credit risk management on the financial performance of commercial banks in Nigeria. It aims to assess how key credit risk indicators—capital adequacy ratio (CAR), cost-to-income ratio (CIR), and non-performing loans (NPL)—influence bank profitability. The study employs a panel regression model, utilizing secondary financial data from commercial banks operating between 2010 and 2022, sourced from the Central Bank of Nigeria and other official records. Descriptive analysis, normality tests, correlation analysis, and panel regression techniques are applied to examine the relationships between variables. The results reveal a strong negative correlation between CAR and CIR, indicating that higher capital adequacy is associated with improved financial efficiency. However, regression analysis shows no statistically significant relationship between credit risk management variables and financial performance, as reflected in return on equity (ROE) and return on assets (ROA). This suggests that while credit risk management practices affect cost efficiency, their direct impact on profitability remains inconclusive. The findings highlight the complexity of credit risk management in commercial banking. While maintaining adequate capital buffers contributes to cost efficiency, other external economic factors may be more significant in determining profitability. The study underscores the need for commercial banks to refine their risk assessment and mitigation strategies to enhance financial stability and performance. Despite credit risk managements theoretical significance, its direct influence on financial performance appears limited. Banks should implement more effective risk assessment frameworks and recovery mechanisms for non-performing loans to optimize financial outcomes. This study contributes to the limited empirical research on credit risk management in Nigeria by providing a comprehensive panel data analysis. Unlike previous studies, it examines correlations and regression effects, revealing that credit risk management practices influence cost efficiency more than profitability.

The study found significant correlations between credit risk management practices and financial performance.A strong negative correlation existed between the capital adequacy and cost-to-income ratios, suggesting higher capital adequacy is linked to improved financial efficiency.However, the panel regression modeling revealed no statistically significant relationship between credit risk management practices and financial performance, indicating that the identified practices do not significantly affect banks financial performance.

Further research should explore the impact of credit risk management on the financial performance of insurance firms in Nigeria, given the limited existing research in this area. Additionally, studies could investigate the effectiveness of different risk assessment frameworks and recovery mechanisms for non-performing loans in enhancing financial outcomes for Nigerian banks. Finally, research could focus on identifying the external economic factors that significantly influence bank profitability in Nigeria, complementing the understanding of internal credit risk management practices. These investigations should consider the unique characteristics of the Nigerian financial landscape and aim to provide actionable insights for policymakers and banking professionals, ultimately contributing to a more stable and efficient financial system. A comprehensive analysis of these factors, utilizing advanced econometric techniques and incorporating qualitative data from bank executives, would provide a more nuanced understanding of the complex interplay between credit risk management, external economic conditions, and bank profitability in Nigeria. This research should also consider the role of regulatory policies and their impact on banks risk management strategies and financial performance.

  1. Credit risk in banks’ exposures to non‐financial firms - Accornero - 2018 - European... onlinelibrary.wiley.com/doi/abs/10.1111/eufm.12138Credit risk in banksyAAAo exposures to nonyAAAafinancial firms Accornero 2018 European onlinelibrary wiley doi abs 10 1111 eufm 12138
  2. THE EVALUATION OF CREDIT MANAGEMENT ON THE PERFORMANCE OF SMALL-SCALE ENTERPRISES IN NIGERIA - IJASOS-... ijasos.ocerintjournals.org/en/pub/article/417706THE EVALUATION OF CREDIT MANAGEMENT ON THE PERFORMANCE OF SMALL SCALE ENTERPRISES IN NIGERIA IJASOS ijasos ocerintjournals en pub article 417706
  3. AJBMR • Doi Publications. ajbmr doi publications home contact us prefix issn aims objectives... ajbmr.com/doi.nswr.10.52283/143AJBMRAAADoi Publications ajbmr doi publications home contact us prefix issn aims objectives ajbmr doi nswr 10 52283 143
  4. A Study of Multicollinearity Detection and Rectification under Missing Values | Turkish Journal of Computer... turcomat.org/index.php/turkbilmat/article/view/1880A Study of Multicollinearity Detection and Rectification under Missing Values Turkish Journal of Computer turcomat index php turkbilmat article view 1880
  5. Credit Risk and Financial Performance of Quoted Commercial Banks in Nigeria · Articles ·... aksujacog.org.ng/articles/22/11/credit-risk-and-financial-performance-of-quoted-commercial-banks-in-nigeriaCredit Risk and Financial Performance of Quoted Commercial Banks in Nigeria A Articles A aksujacog ng articles 22 11 credit risk and financial performance of quoted commercial banks in nigeria
Read online
File size324.85 KB
Pages14
DMCAReport

Related /

JURIS The Correlation of Investment Securities and the Returns of Pension Fund Administrators in an Emerging Economy 2026More at 2026

ILOMATAILOMATA Temuan ini memberi wawasan tentang faktor-faktor yang memengaruhi kinerja keuangan PFA dan strategi investasi yang dapat dioptimalkan untuk meningkatkanTemuan ini memberi wawasan tentang faktor-faktor yang memengaruhi kinerja keuangan PFA dan strategi investasi yang dapat dioptimalkan untuk meningkatkan

JURIS Motivasi Mobilitias Sosial Tokoh Jay Gatsby Di Era Jazz Age Dalam Novel The Great Gatsby Karya F Scott Fitzgerald 2026More at 2026

PUSKOMCERIAPUSKOMCERIA Jay Gatsby melakukan mobilitas sosial vertikal untuk meningkatkan statusnya melalui perubahan nama, pekerjaan, dan bisnis. Ia juga berusaha mempertahankanJay Gatsby melakukan mobilitas sosial vertikal untuk meningkatkan statusnya melalui perubahan nama, pekerjaan, dan bisnis. Ia juga berusaha mempertahankan

JURIS Suatu Kajian Perbandingan Pengaturan Tindak Pidana Penghinaan Tuhan Blasphemy Di Indonesia Dan Di Berbagai Negara Asing 2026More at 2026

PUSKOMCERIAPUSKOMCERIA Di sejumlah negara asing, ada yang secara tegas merumuskan blasphemy dalam kitab undang-undang hukum pidana mereka (seperti Belanda dan Finlandia), namunDi sejumlah negara asing, ada yang secara tegas merumuskan blasphemy dalam kitab undang-undang hukum pidana mereka (seperti Belanda dan Finlandia), namun

JURIS The Effect of Macroeconomic and Bank Specific Factors on the Level of Non Performing Loans in Ghana Panel Data Regression Analysis 2026More at 2026

ILOMATAILOMATA Again, unemployment has statistically significant effect on NPLs and bank performance. Banks need to strengthen credit risk management frameworks, particularlyAgain, unemployment has statistically significant effect on NPLs and bank performance. Banks need to strengthen credit risk management frameworks, particularly

JURIS Artificial Intelligence Based Deepfake Crimes A Conception of Culpability Principle as a Criminal Liability Reform 2025More at 2025

UIDUID Namun, gagasan menjadikan AI sebagai subjek hukum yang mandiri (electronic personhood) dinilai tidak relevan, mengingat AI tidak memiliki kehendak danNamun, gagasan menjadikan AI sebagai subjek hukum yang mandiri (electronic personhood) dinilai tidak relevan, mengingat AI tidak memiliki kehendak dan

JURIS Good Corporate Governance Profitability and Institutional Ownership on Corporate Financial Performance Moderated by Dividend Policy 2024More at 2024

ILOMATAILOMATA Penelitian ini dilakukan selama 4 tahun, yaitu pada tahun 2019-2022. Populasi penelitian terdiri dari perusahaan Badan Usaha Milik Negara (BUMN) yang terdaftarPenelitian ini dilakukan selama 4 tahun, yaitu pada tahun 2019-2022. Populasi penelitian terdiri dari perusahaan Badan Usaha Milik Negara (BUMN) yang terdaftar

JURIS Kejadian Infeksi Saluran Pernafasan Akut ISPA Pada Balita Di Puskesmas Pusako Kabupaten Siak 2023More at 2023

UmriUmri Selain itu tidak adanya perencanaan yang dibuat oleh PJ P2 ISPA sehingga target dari ISPA pada balita ini sulit untuk terjadi penurunan. Untuk komitmenSelain itu tidak adanya perencanaan yang dibuat oleh PJ P2 ISPA sehingga target dari ISPA pada balita ini sulit untuk terjadi penurunan. Untuk komitmen

JURIS The Octave Allegro Method in Risk Management Assessment of Educational Institutions 2020More at 2020

APTISIAPTISI Metode ini dapat diaplikasikan di universitas tanpa memerlukan partisipasi yang luas dari organisasi dan berfokus pada aset informasi yang kritis dalamMetode ini dapat diaplikasikan di universitas tanpa memerlukan partisipasi yang luas dari organisasi dan berfokus pada aset informasi yang kritis dalam

Useful /

JURIS The Behavior of Indonesian Stock Market Structural Breaks and Nonlinearity 2025More at 2025

UGMUGM Additionally, structural breaks identified by ZA and LP tests correspond to the events of financial market liberalization and financial crisis. The nonlinearAdditionally, structural breaks identified by ZA and LP tests correspond to the events of financial market liberalization and financial crisis. The nonlinear

JURIS The Strategy of Collecting Zakat Infaq And Shodaqoh Funds from Orphanage Institutions in Urban Muslim Communities in Bandar Lampung 2025More at 2025

METROMETRO From this study, Amil Zakat institutions must design innovative and adaptive ZIS fund collection strategies in line with current developments to maximizeFrom this study, Amil Zakat institutions must design innovative and adaptive ZIS fund collection strategies in line with current developments to maximize

JURIS Sufism Education In The Formation Of Moderate Islamic Attitudes Of Youth In Urban Muslims 2024More at 2024

METROMETRO The results show that the planning of Sufism education begins with setting goals to be achieved (in this case it is in line with the objectives of SufismThe results show that the planning of Sufism education begins with setting goals to be achieved (in this case it is in line with the objectives of Sufism

JURIS The Causality between Corporate Governance Practice and Bank Performance Empirical Evidence from Indonesia 2014More at 2014

UGMUGM Tetapi, kinerja bank tidak memiliki pengaruh terhadap praktik tata kelolanya. Studi juga menemukan bahwa bank pemerintah daerah memiliki kinerja lebihTetapi, kinerja bank tidak memiliki pengaruh terhadap praktik tata kelolanya. Studi juga menemukan bahwa bank pemerintah daerah memiliki kinerja lebih

ads-block-test